Annual Review Debate — Local Government

Thank you, Mr Chair. It’s a pleasure to kick off the debate this afternoon into the annual review of the local government sector. I just note that the annual review for local government takes part under the Department of Internal Affairs. This year, for the 2022-23 year, the Governance and Administration Committee undertook its first in-depth review of local government under the new Standing Orders. The Department of Internal Affairs has Government oversight for the regulation and guidance that is provided to local government by central government.

Can I thank the officials who provided advice to the committee throughout the hearing, and also to the committee members of the Governance and Administration Committee for their constructive and useful approach to the annual review.

There were a number of matters that we undertook to examine as part of the annual review, and I’m going to note some of those now before we get into questions for the Minister of Local Government. The first was around the future of local government reform. Members of the committee will be aware that the Future for Local Government Review was established in 2021 to assess the ways in which local democracy and governance need to adapt into the future. The review’s final report was published in June 2023 and included 17 recommendations. We noted that the Department of Internal Affairs had advised the select committee that the responsibility for the implementation of that review and its recommendations does sit with local government. But we did note that we would like to see stronger support and reporting into the work that the Department of Internal Affairs does to support local government on the ground.

We also spent a lot of time discussing infrastructure. It will be of no surprise to the committee that the topic of investment in critical water services and water reform was a matter of reporting to the select committee, and I’m certain will be part of today’s debate and questions that are put to the Minister.

Finally, I did just want to make some comments around another matter that was brought to the attention of the select committee, around ongoing support and financing of local government. This is a matter of critical importance for central and local government to resolve, and the increase in rates that we see and the increase in debt that we see across local government is a matter that will continue to have an impact on ratepayers. It does fall to local and central government to work together to address how we can resolve the critical matter of how we fund the services and investment needed to run local government in New Zealand.

So no doubt it will be an interesting debate this afternoon. Again, I thank officials for advising the select committee, and I thank the select committee again for what was a very constructive look at local government as part of our first in-depth review of the Department of Internal Affairs. Thank you, Mr Chair.

Thank you, Mr Chair. My question’s around strategic intent, and it follows the Minister and the Prime Minister, along with the Mayor of Auckland, Wayne Brown, announcing the Local Water Done Well policy, an agreement unanimously reached by Auckland councillors that will avoid a 25.8 percent water rates increase on water users in and around Auckland this coming financial year. They were up for $348 per average household, and it will be a lot, lot less than that. So my question looking forward is to the Minister in the chair, Simeon Brown: when will the broader range of structural and financing tools be available to other councils to ensure they can finance themselves appropriately and access the long-term debt required for investment into water services?

Tēnā koe, Mr Chair. It’s a pleasure to be the third member of the illustrious Governance and Administration Committee to ask questions today. I’d like to ask more about the Future for Local Government report, He piki tūranga, he piki kōtuku, which was issued on 16 June. I’d like to ask: does the Minister agree, first of all, that our system of local democracy and governance needs to evolve? And which of the report’s five identified shifts—amongst those wider recommendations were five specific shifts: strengthening local democracy, especially increasing citizen participation; authentic relations between councils and hapū, iwi, and Māori, enabling self-determination and shared authority; number three, a stronger focus on community wellbeing; number four, a genuine partnership between central and local government to coinvest and deliver wellbeing outcomes; or number five, moving from a constrained funding system to an equitably funded system that enables communities to thrive. So I’m asking the Minister which of those five he thinks is the most important.

Thank you, Mr Chair, for the opportunity to take a call in regards to the annual review of local government. This debate, obviously, relates to the last 12 months, or the last financial year, so I will keep my comments within that, but, obviously, I will give some colour where necessary in terms of the direction this Government is taking. I thank the members for their questions. I thank the committee for its work on the review, and there has certainly been a range of issues that have been raised through the committee stage.

The question from my colleague Cameron Brewer around Local Water Done Well, noting what has happened there. Obviously, we’ve taken a very different approach from the last Government in terms of water; the last Government had a one-size-fits-all approach to water, and that ultimately ended up with them spending, I think, $1.2 billion in the last six years, mandating co-governed mega-entities or local councils across the country. Ultimately, the vast majority of councils rejected that approach, which is what we are doing through our Local Water Done Well approach, which we are delivering on.

The second question is in relation to the future of local government review. Look, I think the point I’d make about that review is it raised a number of good points, but it ended up finding all the woke answers—you know: “Well if we’re going to fix it, let’s lower the voting age. That’s going to solve the problems.”, “Why don’t we entrench the four wellbeings into local government. That’ll fix it as well.”, “What about STV? If you just had STV voting, that will fix the problems that local government are facing.”

Well, ultimately, that ended up with finding all the woke answers rather than actually dealing with some of those actual challenging issues, and then, effectively, said, “Well if you just give more money, then that will solve all the problems”, and that was the answer of the last Government. It was, ultimately, that if you simply just put more money—I think I heard one of their former Ministers once say, “Just appropriate it. You’ll be able to fix all of the problems”. So, ultimately—

Hon Willie Jackson: Just say what you feel.

Hon SIMEON BROWN: I am saying exactly what I feel. I’m saying exactly what I feel, Mr Jackson. Effectively, it was trying to also entrench co-governance through local government, which was another part of that report.

The question was: does the system of local democracy need to evolve? Well, I’d say let’s start with the word “democracy” and let’s ensure that people are able to have their say and that communities are able to vote and have their say, and that’s the side of that particular question that this Government stands on.

Thank you, Mr Chair. Well, thank you for answering the previous question and giving your view of the independent report. I have a second question in a different area.

New Zealand is highly vulnerable to natural hazards, as the Insurance Council notes, and this is a matter that came to our Governance and Administration Committee. We cannot overstate the importance of risk reduction, readiness, response, and recovery. Dave Gawn, Chief Executive of the National Emergency Management Agency, recently spoke to us and said that the New Zealand Emergency Management System has been set up to manage small events, generally weather events—not big catastrophes like the Hikurangi subduction or the Alpine Fault, which could be level 8 and almost unimaginable.

Now, I’m asking the Minister of Local Government for his thoughts because civil defence and emergency management committees are run by local councils with fire, police, and other organisations—hopefully iwi, although you do wonder; they would be better to be woke than asleep in my view, when we come to emergencies. However, smaller councils do not employ any specialised civil defence and emergency staff, and, in addition, Fire and Emergency New Zealand have not extended their local advisory committees to all of New Zealand.

Does the Minister of Local Government have concerns that councils do not have adequate resources to fulfil their civil defence and emergency management duties?

Thank you very much, Mr Chair. I’m keen to sort of ask a question the Minister alluded to in his answer previously; he talked about democracy.

Being the MP for the Bay of Plenty, for the last three years we have had appointed commissioners at our local city council, at the Tauranga City Council, and so I’m keen to know—because that was an appointment from the previous Government and it was an appointment under this term that we’re reviewing. They were appointed on 9 February 2021 through to the elections in October in 2022, to align them back to the local government elections, and then their appointment was extended to July 2024. I’m keen to understand the Minister’s priorities in the space around the return to local democracy and the use of appointed commissioners, and what he sees is the importance around the local community having their say for the people who represent them around the council table and the decision making being made on behalf of the local community.

If we think about Tauranga, we’ve got our local elections taking place in a couple of months’ time and the community is ready to re-elect and to elect the council to represent them around the table and to be held accountable to the ratepayer. That’s what the community, locally, in Tauranga, is keen to do. But they’re also keen to ensure we’ve got representatives sitting at that council with future direction, future forward thinking, so we can take our city—the fifth-largest in New Zealand—forward and have the prosperous city that we want to have.

So I’m really keen to understand from the Minister how he likes the use of appointed commissioners, what he views to have been under their term, and what he sees around the importance of local democracy and decision-making at local city councils.

Thank you, Mr Chair, and I thank the members for their questions. The question from Celia Wade-Brown around councils fulfilling their obligations in relation to civil defence—and obviously that is a critically important role that councils have, alongside civil defence which leads the Government’s response. It’s really important that councils do play that role, and ultimately that’s why my message to local government is to focus on the must-haves, not the “nice-to-haves”. And so that’s the focus that we expect from local government.

In terms of the question around Tauranga and local democracy, we are committed as the Government to restoring democracy. We are not extending the term. We’ve confirmed that the decision made by the previous Minister will remain unchanged, which means that in July this year the residents of Tauranga will be able to elect their own mayor and elect their own councillors and we will not be having some form of—

Tom Rutherford: Hybrid.

Hon SIMEON BROWN: —hybrid model, or commissioners in place alongside elected members. Ultimately, what we will be doing there is ensuring that the local community can decide who will represent them in that community.

The wider question, though, around the role of commissioners—so Part 10 of the Local Government Act does give the Minister of Local Government certain powers to intervene in particular circumstances, and, ultimately, where there are problems. And that is a process which, ultimately, I will reserve judgment on in terms of other councils.

Thank you, Mr Chair. Just a couple of questions to the Minister over this whole democracy area. Would the Minister agree that we have seen quite a diverse set of councillors over the last year or two—last couple of years? With the change in terms of Māori seats, we have seen Māori being given an opportunity that they have never had before. Would the Minister agree that in past years so few Māori would be able to get elected on to the council? So in the previous Government, obviously, we thought, “Well, this is an opportunity.” Now we’re seeing record numbers. We’re seeing Shane Jones’ nephew, for instance, as the mayor up there in the North. You’ve got a whole Māori board up there in the North—opportunities they’ve never had before.

So I’m asking the Minister, in all seriousness, did he see benefits in that? And if he did, how can we maintain Māori representation? Surely Māori have a right to be a part and play a part in New Zealand’s democracy today, because there’s been so few who’ve been afforded an opportunity. So what are the Minister’s plans in terms of giving Māori opportunities, giving them the chance to get on to the council? Is it just about returning to what has been done in the past, or is there some new, innovative, creative strategy that the Minister might be able to give us?

Thank you, Mr Chair. I thank the member for his question. I note this is the former Minister who once famously said “democracy has changed”. Well, I’m not quite sure what he means by “democracy”, but on this side of the House, democracy has not changed, because we actually believe in people of this country being able to decide who represents them.

When it comes to the issue of Māori wards, we are going to reverse the position to ensure that local communities can make those decisions as to whether there is a Māori ward on a particular council—that is about letting local voters actually make decisions. In some councils around New Zealand, I expect they will vote to retain those Māori wards, and in other councils they may not. That is ultimately about local communities, local voters, the public of New Zealand, the voters of New Zealand being able to have their say.

And he mentions Matua Shane Jones’ nephew, Moko. Well, Moko is not elected as the mayor of the Far North on a Māori ward; he is elected as the Mayor of the Far North District Council in an open contest against every single other person who decides to put their name forward for elected office. That is how it is and that is how he got elected. Whether a council retains its Māori ward because the voters in that community decide they want it, or they don’t, I am confident that more and more Māori will get elected to local councils up and down this country.

Thank you, Mr Chair. I’d just like to ask the Minister, following on from the erudite questioning from my colleague the MP for the Bay of Plenty, Tom Rutherford, and the less erudite contribution from former Minister Willie Jackson—we’ve got a situation about democracy in New Zealand, and, as one famous commentator once said, “Throw the buggers out.” That’s the real benefit of democracy; you can throw them out when you don’t want them.

In Tauranga, we have been unable to throw the buggers out. No matter what decision they have made, there has been no opportunity for the good people of Tauranga Moana to throw the buggers out. Well, I thank you for clarifying, Minister, that there will be full democracy returning to Tauranga in the elections on 20 July.

But I do have a question that I would love to hear you expound on, and that is, Minister: what do you think about what the commissioners, in their time as the leaders of Tauranga City Council—what do you make of the decision the commissioners took to ignore a petition which was submitted to council with the required amount of votes to have a referendum on a Māori ward? What do you make of the commissioners’ decision to ignore such feedback from the community and implement a Māori ward?

I’d like to also note that we are going to be having a Māori ward established in Tauranga, where there has never been one before, due to the decisions made by this commission. I’d ask the Minister to reflect on what has happened here.

I acknowledge the question. Ultimately, the commission has the same responsibilities as an elected council to make decisions under the law. What I would say, though, in relation to the issue of the Māori ward, is that there will have to be a referendum in Tauranga. The legislation we’ll be bringing to the House will mean that that referendum will have to happen between now and the next local government elections. Ultimately, that is when Tauranga people will be able to make their decision as to whether that ward stays or goes.

Thank you, Mr Chair, and I thank you, Minister Brown, that I have the opportunity to ask a few questions, specifically around Auckland Council. You’ve made the announcement with regards to the water increase percentage. Just a couple of questions, and my first question is: can you explain the financial sustainable model for the record to ensure that these rates will remain affordable?

My second question is around infrastructure. As you’re aware, Minister, the committee has had quite an in-depth discussion with regards to infrastructure investment in terms of local government. Specifically in Auckland, there have been many transport projects that have been delivered, especially walking and cycling. Can you explain, or can you highlight, that these will be continued as an affordable investment in local communities?

Thank you very much, Mr Chair. This is a time-limited debate, and by our calculations, the National Party have roughly seven minutes remaining and there’s three full sessions to go. So it’s very disappointing to see the National Party using up their time with patsy questions that they could indeed just go and ask the Minister themselves and save the Minister’s time to be able to answer questions. It would be a tremendous shame if we get to the sessions on Thursday and next week and Government Ministers simply don’t have time to answer genuine questions. That would be a shame, indeed.

So I’ll keep my contribution to the point, and, hopefully, the Minister will answer in the same vein. Does he agree with the Prime Minister that local governments just need to “stop doing dumb things”, does he agree that rating systems are currently unsustainable, and what is the projected credit rating of Watercare after the announcement he made on Sunday?

Celia Wade-Brown: Mr Chair?

Tim Costley: Mr Chair?

CHAIRPERSON (Teanau Tuiono): Celia Wade-Brown.

Hon Members: Oh!

You’ll get your turn, I’m sure. Thank you, Mr Chair. The Future for Local Government report—we heard much about a wider vision of democracy for local government that included citizen participation. Of course, councils do consultation, and many of us see that as part of democracy, not only a vote every three years. So if the Minister considers referendums are such a vital part of democracy, would he suggest that as well as for Māori wards, we have referendums on rates rises, cycleways—why not?—and a number of other things? We consult on these things at local government. Why is one issue of representation needing a referendum, and the number of councillors, the ward boundaries, and a number of other matters, apparently, don’t need a referendum?

Thank you, Mr Chair. A number of quick answers to some questions. In regards to affordability of rates rises, in particular in the water context, in terms of—we’ll be introducing economic regulation to ensure that consumers are paying appropriate prices and to maintain investment.

In terms of Watercare’s credit rating: obviously, this is a review going backwards. Obviously, I’ll be very generous and answer the member’s question, but, ultimately, that will be determined as part of its separation when that separation is finalised, as the member will know. He was responsible for this particular area not too long ago.

He tried to make the point that his plans were going to be more affordable. Well, the briefing to the incoming Minister from Entity A made it very clear that Entity A was not going to be in place by 1 July, which meant Aucklanders were going to have to pay 25.8 percent increases in their water rates if that Government had got re-elected. Thankfully, that didn’t happen.

Thank you very much, Mr Chair. It’s extraordinary to hear those sorts of responses. But I do note that he didn’t answer one of my questions, so I’ll repeat it: does he agree with the Prime Minister that all local government needs to do is to stop doing “dumb stuff”, and does he agree that the rating system as it stands is currently unsustainable?

Well, I would agree that councils should not do dumb stuff, and also, when you think about it—and I just made the point earlier—we want councils to be focused on must-haves, not “nice-to-haves”, and that’s exactly what we’re doing as a Government. We’re doing the exact same thing, as Government, going line by line to ensure that the focus is on the must-haves, not the “nice-to-haves”, because we’re in tough economic times. We have had an inflation bomb left behind by the last Government and we’re trying to deal with these challenges. Local government is dealing with these same challenges, too, and so the focus needs to be a focus on core business and must-haves, not “nice-to-haves”, and to stop the dumb stuff.

Well, we’ve heard a lot in the debate so far, particularly around the structure, and I’d like to tap not just into structure but infrastructure.

If we think about structure, thinking about councils and how they are formed, how they are funded, how they are elected, how they operate—and we’ve spoken briefly on the local government review that was done last year. The future of local government—particularly around the suggestions of, for instance, giving 16-year-olds the vote and changing the mandate or the requirements for people to be elected to Government, and maybe the Minister has some views on what the future really looks like. But I’d like to move from the structural to infrastructure, because there are 17 recommendations, as the member for the Greens mentioned, in that report. Many drop in the word “wellbeing” every second sentence, but none around infrastructure, none about actually delivering the quality roads and pipes and opening up opportunities for development that people need if they are indeed to have any wellbeing at all. Nowhere in that is there a focus on delivering public services, which I think is a key function of local government. And so I’d be really interested to hear the Minister’s views on that.

For example, in our region, in the Kāpiti Coast, where I represent, the good people of Mills Albert would have been out there replacing our pipes. We’ve brought on water meters. We don’t want to be lumped in with Wellington metro when it comes to three waters. Actually, we believe in autonomy, but we do believe that there needs to be a focus on infrastructure. If I think about in Horowhenua, where we’re building an entire new suburb—3,500 homes—it needs roads, it needs pipes, it needs connection, it needs the ability to develop. That’s how wellbeing comes, not by adding it to a report.

So I’d be really interested to hear from the Minister what he thinks the future of local government looks like. I’d be really interested to hear his views that came out of the report on things like forming new Government departments, new entities, new bureaucracy, if that is indeed the answer, or if we need a focus on world-class infrastructure. Do we need it on world-class infrastructure, on delivering public services rather than these mandates for new Government entities and bureaucracy?

Members, our time with the Minister of Local Government has ended. The Minister for Oceans and Fisheries is now available for 30 minutes to respond to members’ questions.

Members, just for members’ information, usually at this point we have someone nominated from the select committee to give a non-political summation of the annual review process—usually that’s the chairperson. So do I have an honourable member from the Primary Production Committee to give that non-political summary of the annual review process?

Oceans and Fisheries